EXPENSE CONSTANT SUPPLEMENT



NAIC EXPENSE CONSTANT SUPPLEMENT

CALCULATION OF COMPANY LOSS COST MULTIPLIER

WITH EXPENSE CONSTANTS

(EFFECTIVE: March 31, 2008)

(This form must be provided ONLY when making a filing that includes an expense constant)

| |This filing transmittal is part of Company Tracking # | |

| |This filing corresponds to form filing number | |

| |(Company tracking number of form filing, if applicable) | |

Development of Expected Loss Ratio. (Attach exhibit detailing insurer expense

data and/or other supporting information.)

Selected Provisions

| | | |Overall |Variable |Fixed | |

|4. | | | | | | |

| |A. |Total Production Expense | | | |% |

| |B. |General Expense | | | |% |

| |C. |Taxes, License & Fees | | | |% |

| |D. |Underwriting Profit & Contingencies* | | | |% |

| |E. |Other (explain) | | | |% |

| |F. |TOTAL | | | |% |

| | |*Explain how investment income is taken into account. |

|5. |A. | Expected Loss Ratio: ELR = 100% - Overall 4F | |% |

| |B. | ELR in decimal form = 5A ELR in Decimal Form | |

| |C. | Variable Expected Loss Ratio: VELR=100% - Variable 4F | |% |

| |D. | VELR in Decimal Form = 5C VELR in Decimal Form = | |

|6. |A. |Formula Expense Constant: | |

| | |[(1.00 divided by 5B) – (1.00 divided by 5D)] times [Average Underlying Loss Cost] | |

| |B. |Formula Variable Loss Cost Multiplier | |

| | |(3B divided by 5D) | |

|7. |A. |Selected Expense Constant = | |

| |B. |Selected Variable Loss Cost Multiplier = | |

8. Explain any differences between 6 and 7:

| |

|9. |Rate level change for the coverage(s) to which this page applies | |% |

PC IRF

W:\Mar08\TF\Casualty Actuarial\03-31 LCM WC filing form.doc

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